Bank of America and the U.S. Department of Justice failed to reach an agreement on a multibillion-dollar settlement that would resolve both state and federal investigations into the bank’s sale of mortgage-backed securities that later imploded, The New York Times reported June 10.

Bank of America made its most recent offer of more than $12 billion on June 9; the Justice Department was seeking $17 billion, which would have been the biggest payout by any of the nation’s banks to date. The next day, the Justice Department finished its work on a civil complaint against the bank, alleging it had sold MBS that ultimately led to billions of dollars in losses. It’s possible the bank still will reach a settlement in an effort to avoid a trial, the Times reported.

The bank’s resistance to settling allegedly stems from the fact the dispute involves MBS sold by Merrill Lynch, which the bank purchased in 2008 in the midst of the financial crisis under pressure from the Federal Reserve and the U.S. Department of the Treasury.

Another major hurdle is that Bank of America wants most of the settlement money to be in the form of mortgage assistance to homeowners, but the Justice Department is pushing for a significant amount in the form of a cash penalty, the Times reported.

If Bank of America reaches a deal, it will be on top of an April settlement it reached with the Federal Housing Finance Agency for $6.3 billion in cash.

While Justice Department prosecutors claim that banks overall remain unwilling to acknowledge responsibility for the financial crisis, banks argue that penalties have actually exceeded losses to investors, the Times reported.

Bank of America claims the Justice Department’s proposed penalty is arbitrary and unfair since the bank would have avoided liability had it not, under government pressure, acquired Merrill Lynch.

The Merrill Lynch business units are now among Bank of America’s top performers, the Times reported.